The County is seeking to improve the County Fairgrounds property, one of the larger contiguous sites in Silicon Valley (approximately 150 acres). The Board will be receiving a report about the results – including individuals and firms responding – of the Request for Proposals that was issued on December 13th, 2016 for the long-term lease of property at the Santa Clara County Fairgrounds.

A list of the 5 responses received is attached to the item. Among them:

Brian Bumb: Proposes to be either master-developer and master-operator of the entire site, or to operate an upscale public market on 60 acres in the event center area. As master developer, they propose to include a 14 field soccer complex developed by the San Jose Earthquakes and San Jose Soccer

Complex Foundation; a high-tech, high-touch family recreation adventure park developed by Recreation Entertainment Global, community softball and baseball fields and an open air events bowl.

There are also proposals for a 14-acre Community Hub (Patricia Rodriguez), a 20-acre Go-Kart racing facility (Donald Durbin), a 1-acre curling center, and 408MX to continue their current tenancy.

The responses will be evaluated in detail by Facilities and Fleet and Asset and Economic Development staff, with support from the County’s consultants, and the results of that analysis will be brought back to the Board at a future meeting. Depending on the results of the analysis, the Board may direct staff to negotiate a lease with one or more of the proposers to bring back for Board approval, reissue the Request for Proposals with or without changes, or provide other guidance. When the results of the RFP process are reported to the Board at a subsequent Board meeting, members of the public are welcome to attend and will have an opportunity to comment.

Authorizing sale of County-owned former San Jose hospital property to County Housing Authority for $30.5M

Staff are recommending that the Board adopt a resolution authorizing the sale of property located at 675 East Santa Clara Street in San Jose to the Housing Authority of the County of Santa Clara, in the amount of $30,459,000. In addition, staff are recommending that the Board delegate authority to the County Executive to negotiate and the President of the Board of Supervisors to execute, any and all documents necessary or appropriate to facilitate the conveyance of the Property.

The Housing Authority of the County of Santa Clara (HACSC) approached the County and proposed acquisition of the ten parcels listed above (Ten Parcels) that are comprised of smaller, non-contiguous parcels (2.29 acres) and about thirty-seven percent (4.17 acres) of the main, contiguous site that formerly housed the San Jose Hospital. The HACSC intends to land-bank the Property and may, at some point in the future, consider whether to develop affordable housing and administrative office space on the Property. Based on appraisals performed by CBRE Valuation and Advisory Services (CBRE), the total purchase price for the Ten Parcels is $30,459,000. Proceeds from the sale will be General Fund revenues and can be used for any other General Fund capital or program needs.

The following business terms will be included in the PSA:

County shall receive full market value for the Property at closing ($30,459,000) as determined from the CBRE appraisals, based upon the Property’s potential future entitled value, including the increased density which would be provided under the current draft East Santa Clara Urban Village Plan if and when approved by the San Jose City Council.

County shall have a first right to purchase any parcel that HACSC wishes to sell during the first three years after closing, at the same price HACSC paid. After that, the County shall have a first right to purchase any such parcel at fair market value, determined by appraisal.

County shall have the right to repurchase any portion of the Property at fair market value (but not the obligation) if development on the main site does not commence within ten years from close of escrow.

Granting $11.9M to Housing Trust from General Fund Contingency Reserve to support Measure A-linked predevelopment loan program for affordable housing

Staff are recommending that the Board approve appropriation modification No .184, transferring $12,000,000 in General Fund Contingency Reserve funding to the special revenue fund for 2016 Measure A Housing Bond projects. In addition, staff are recommending that the Board approve a first amendment to the Agreement with Housing Trust Silicon Valley for supportive housing predevelopment loan services, increasing the contract amount by $11,900,000 from $5,000,000 to a total of $16,900,000 and extending the agreement for an 8-year period through June 30, 2027.

Of the $12,000,000 transfer amount, the Administration proposes using $11,900,000 as predevelopment loans to help affordable housing developers acquire and/or improve real property for purposes consistent with the resolution authorizing the Housing Bond. The Administration proposes using $100,000 to cover the initial costs of an independent external auditor that will support the Independent Citizens’ Oversight Committee. These expenses are likely eligible Housing Bond related costs that would be reimbursed with Bond proceeds. On February 7, 2017, the Board Adopted Resolution No. BOS-2017-13 which declared its intent to reimburse prior expenditures for Measure A Project Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian Page 2 of 4 County Executive: Jeffrey V. Smith Agenda Date: April 11, 2017 Implementation (February 7, 2017; Item No. 21). The $12,000,000 from the County General Fund would be repaid by December 31, 2017 from the first issuance of the Housing Bond.

The Administration has determined that in order to facilitate the development of affordable and supportive housing, the County must foster a development environment that is flexible and responsive to development opportunities. Affordable Housing developers struggle to compete with market rate developers. Funding a predevelopment loan program is a critical tool in creating a pipeline of developments with significant supportive housing units. The predevelopment program would consist of a loan program and/or acquisition fund that would enable affordable housing developers to acquire land for the development of housing, which would include supportive housing units. Depending on the size of the development, the minimum number of supportive housing units will range between 20 and 30 percent of the total proposed units. The final number of supportive housing units per development would be adjusted as the proposed development is more formally defined.

Ellis Act Ordinance providing procedures for removal of rent stabilized units from the market, including reqs for noticing, relocation benefits, tenant rights to return, and control of rents for apartments constructed or returned to the market within 5 years of withdrawal

Staff recommends (1) adding Part 11 to Chapter 17.23 of the San Jose Municipal Code to provide procedures for an owner’s withdrawal of rent stabilized apartments from the rental market including requirements for noticing, relocation benefits, the tenant rights to return, and control of rents for apartments constructed or returned to the rental market within five years of withdrawal; (2) establishing a schedule for Relocation Assistance and establish the Filing Fee and other fees pursuant to the Ordinance.

The adoption of an Ellis Act Ordinance will provide guidelines to property owners who plan to remove rent stabilized apartments from the rental market. The adoption of this ordinance will require property owners to: notice tenants prior to the withdraw from the rental market; pay relocation benefits to impacted tenants; provide the right to return for impacted tenants over a ten-year period; and require the re-control of apartments when they re-enter the rental market within a five-year period.

The Ellis Act Ordinance also provides benefits to tenants living in rent stabilized apartments that will be withdrawn from the market.

A summary of the Ellis Act Ordinance requirements is provided below:

Notice of Intent to Withdraw – Owners are required to give tenants advance notice of the owner’s Intent to Withdraw the apartments from the market.

Relocation Assistance – The Ordinance sets forth the proposed relocation benefit provisions for tenants being displaced when rent-stabilized apartments are being removed from the market per the Ellis Act.

Voluntary Option to Offer a Similar Apartments – Provides a relocation benefit alternative to be created for property owners who may be willing to relocate impacted tenants to vacant apartments at other properties that they own. The option is a voluntary option for tenants to select and includes a reduced amount to the tenant for relocation benefits.

Relocation Assistance in Vacant Apartments– Addresses the applicability of relocation benefits to residents who were given no-cause notices to vacate within 12 months prior to the owners issuing Notices of Intent to Withdraw.

Tenant Right to Return – Covers the tenants right to return to existing apartments or newly constructed apartments on a property where the original rent stabilized apartments were removed from the market through the Ellis Act process (“Ellised” and the owner’s obligations to notify the tenants of this right).

Reporting Requirements – Covers the owner’s obligations to provide reports to the City. The City will be tracking the information and if any vulnerable population will be impacted, the City wants to be notified as soon as possible. These reports will also evaluate the effectiveness of the Ellis Act program over time.

Re-control – This section covers the requirements for apartments being returned to the Market within five years after being withdrawn through the Ellis Act and for new apartments built on the property after demolition and offered for rental within five years of the withdrawal.

These recommended Ellis Act Ordinance provisions will provide protections for tenants in rent- stabilized apartments throughout San Jose.

The adoption of the staff recommended Tenant Protection Ordinance will provide time-limited protections for tenants in rent-stabilized properties from no-cause notices. The adoption of this Ordinance requires that a landlord must state a Just Cause in order to remove a tenant when a tenant is enrolled in the Tenant Protection Ordinance. The second recommendation will direct staff to incorporate a requirement that a property owner offer a renewable one-year written lease to tenants in the forthcoming Apartment Rent Ordinance. The third recommended action will direct staff to return with a revision to the Interim Apartment Rent Ordinance to remove the exemption for apartments with rental subsidies. If adopted, this revision will also be incorporated into the forthcoming revised Apartment Rent Ordinance. Finally, staff would be directed to research the existing tenant relocation benefits provided in the City’s Municipal Code to develop a report and potential recommendations to review existing policies to simplify administration and enforcement.

Under the Tenant Protection Ordinance, there will be certain circumstances in which the property owner will not be able to give tenants a no-cause notice to vacate. This is called “Just Cause for Eviction” protections. Tenants that damage the building, refuse to pay rent, or otherwise violate their lease can still be legally noticed and evicted. The Tenant Protection Ordinance provides benefits to tenants living in apartments that are experiencing housing, building, and fire code violations, or need important repairs that are not being addressed. It also provides protections to tenants who exercise their rights to petition under the Apartment Rent Ordinance. The following is a summary of these requirements:

Scope – The Tenant Protection Ordinance will apply to all apartment buildings with three or more apartments, guest rooms in a guesthouse, as well as any unpermitted housing space. This scope is recommended to ensure uniformity in the application of tenant protections for all multifamily rental owners and tenants in San Jose.

Enrollment – The Tenant Protection Ordinance is an enrollment-based program of protections for tenants. The Ordinance provides protections to the tenant immediately upon providing written notice to the property owner or the appropriate government agency of the issue or violation of tenant/landlord law.

Appeal Process – Both the property owner and tenant have access to an appeal process administered by the Housing Department. The provision of Just Cause protections can be appealed by the property owner if they believe that the basis for enrollment is invalid. This could be due to a claim that the tenant caused the damage, or the tenant refused access to the apartment for the necessary repairs to be made. The tenant can appeal the Notice of Satisfaction by notifying the City if the requested repair was not completed or was completed improperly.

Just Cause Protections – In cases where a tenant is enrolled in protections under the Tenant Protection Ordinance, a tenant cannot be lawfully evicted except for the reasons outlined in this Ordinance.

Additional Tenant Protections– This memorandum includes three additional recommendations that increase tenant protections: 1) The requirement to offer a one-year written lease; 2) removal of the exemption for apartments with rental subsidies in both the Interim Apartment Ordinance and forthcoming revised Apartment Rent Ordinance; and 3) directs staff to develop a report that analyzes the relocation benefits imposed by other cities and establishes consistency among San Jose’s existing relocation policy benefits.

Direction on moving forward with San Jose Clean Energy (Community Choice Aggregation); Council Member Khamis recommends deferral until they hear from opposition

Council will receive additional information on potential scenarios and governance models for San Jose Clean Energy and share feedback from a community meeting held on March 15, 2017, including:, analysis of a worst case scenario, status quo, best case scenario, governance and operational models.

Memo from Council Member Khamis recommends deferring this item and scheduling a full hearing and discussion of the item for a date when the inclusion of panelists with opposing viewpoints on CCA/CCE can occur. If staff is unable to schedule this discussion at least ten business days prior to their planned April 25, 2017 report to the Council on their recommendation whether and how to proceed with SJCE, he further requests that the April 25,2017 report be postponed until at least ten business days after the Council discussion occurs.

Community choice aggregation (CCA) is an energy procurement model that allows local governments to pool or aggregate the electric load of their residents, businesses, and institutions to purchase electricity on their behalf. A CCA would determine the source of electricity including the percentage renewables in the power mix, set customer rates, and determine the use of revenues for local energy programs and projects. The existing Investor Owned Utility (IOU), Pacific Gas and Electric (PG&E), would continue to maintain the transmission and distribution infrastructure, deliver the energy, and bill customers.

At the March 1. 2016 City Council meeting. Council directed staff to proceed with an RFP for an entity to develop, finance, launch, and operate a CCA program. Council directed staff to explore the single-jurisdiction CCA operational model allowing San Jose, not a third party, to manage the CCA program. Further, Council asked staff to return with an RFP framework prior to issuing it, and to return with additional program recommendations in the fall. Subsequently, Council allocated $300,000 in one-time funding to conduct a technical study that would help inform Council about whether to proceed San Jose’s CCA program, also referred to as San Jose Clean Energy (SJCE).

Bevilacqua Knight, Inc. (BKi) and their subconsultant EES Consulting were hired to develop a technical study and business plan for SJCE. A public draft Business Plan was released on Feb. 3, 2017. On Feb. 13, a Council Study Session was held to review the Business Plan.

The Planning Commission is recommending that Council reject staff recommendations amending the Zoning Code and the resolution revising the policy titled “Conversion of Mobilehome Parks to Other Uses.” At that Planning Commission’s hearing, mobilehome park residents and attorneys from the Silicon Valley Law Foundation representing mobilehome park residents spoke on the items. Several speakers commented that, as proposed, under the draft mobile home park Closure Ordinance, it is easier to close a mobilehome park, sell the property, and then convert it, thereby circumventing the existing conversion ordinance. They stated that prohibitions needed to be added to prevent the landowner from doing such circumvention, such as a 10-year ban on property being sold. They noted that none of the ordinances actually preserve a mobile home community, but might make the sale of a mobilehome park difficult. A representative from the Law Foundation stated that having a closure ordinance will mean that San José will be stripped of its ability to review displacing applications that really seek to convert parks and avoid replacing affordable housing units.

New letter from Hopkins & Carley submitted on behalf of the Manufactured Housing Educational Trust (MHET) and the owners of mobile home parks in San Jose, includes the following objections to the proposed General Plan changes, the Council Policy 6-33 changes, the Mobilehome Park rent control ordinance, the Mobilehome Park conversion ordinance, the zoning code changes and the Mobilehome Park closure ordinance:

The closure ordinance and the conversion ordinance and policies are inconsistent with and preempted by state law

The city’s package of infringements on property rights violate the united states constitution

The closure ordinance alone violates the US Constitution

The use of policy guidelines to avoid amending the mobilehome park conversion ordinance is a violation of constitutional rights to due process

The conversion ordinance violates the US Constitution prohibition of taking property without just compensation

CEQA requires environmental review before the closure ordinance can be adopted and before the general plan can be changed

Report back re: Roosevelt Park and Little Portugal Urban Village Implementation Chapters, including feedback from additional outreach to developers

New memo from Mayor Liccardo, Vice Mayor Carrasco, Council Members Jones, Peralez, and Davis recommends (1) moving the two proposed 100% deed-restricted affordable housing development projects forward immediately in the entitlement process, and (2) returning to Council in the May 2017 cycle of Director-initiated General Plan Hearings with a simplified, transparent, and predictable financing mechanism for financing Urban Village amenities, and for implementing Urban Village Plans. That financing mechanism shall consist wholly of the establishment of a reasonable Urban Village Amenities (UVA) Fee, based on a pre-determined formula, paid by the developer of any proposed residential development in an Urban Village.

From memo: “the City must avoid the temptation of building a long, winding, and uncertain road for developers seeking to invest in Urban Villages. Mandating extensive economic or financial studies prior to setting fees in every Urban Village, for example, creates considerable uncertainty for any property owner that can deter the investment…. Moreover, subjecting every project to a negotiation with City staff (and inevitably, with the Council) invites a parade of predictable problems.”

The supplemental memorandum from Planning Director addresses concerns from the December 13, 2016, City Council public hearing, where the Administration removed the General Plan Text Amendment for the Roosevelt Park and Little Portugal Urban Village Implementation Chapters from the agenda, citing the need for additional outreach to developers. Staff has undertaken additional work in response to comments received from various stakeholders, including SPUR and the development community. On March 10, 2017, staff presented the two Implementation Chapters (which are substantially identical) at the Developers’ Roundtable to obtain input. The development community had the opportunity to review the previous drafts of the Implementation Chapters, as they were part of the Planning Commission and City Council packets available online. The updated Implementation Chapters for the Roosevelt Park and Little Portugal Urban Village Plans are attached to this memorandum.

Changes to the Implementation Chapters include the following:

Inclusion of guiding principles to provide more clarity about the process for securing Urban Village Amenities.

Removal of the requirement that 75 percent of the planned commercial capacity must be built prior to any residential mixed-use projects being considered or approved by the City. This requirement was not replaced with an alternative requirement.

Removal of Implementation Actions 2 and 5, which were:

Implementation Action 2: Propose a Director initiated rezoning of properties within the Roosevelt Park/Little Portugal Urban Village that will codify the design goals and policies of this Plan and will implement its Urban Design goal,

Implementation Action 5: Develop a Development Agreement template for the Roosevelt Park/Little Portugal Urban Village that would provide the development community with more clarity on the development agreement process and the level of contributions that would be sought by the City through the negotiation process.

Addition of a privately-owned and maintained art as an Urban Village Amenity.

The letter from ROEM Development Corporation, sent to various City, County, and VTA representatives, claims that the VTA lost the opportunity for a robust developer competition for the Tamien Station site primarily due to the sequencing of the public garage delivery ahead of the residential development. ROEM makes several claims for why they should have been selected for the project:

ROEM’s proposal offers less revenue to VTA because it offers more affordable housing, an attribute the VTA noted would be evaluated more favorably

Accept the draft Analysis of Impediments to Fair Housing Choice; and recommend item for full Council consideration at the April 25 City Council meeting. The purpose of the AI is to provide an overview of the laws, policies, and practices that may hinder residents’ ability to choose housing in the City. It also includes recommended actions to overcome those impediments.

Based on the data presented, as well as the community feedback gathered from 2014 through 2016, the City has identified four factors as the most significant impediments to fair housing in San Jose. These factors, as well as the strategies designed to mitigate those impediments, are listed below.

Approve an Ordinance adding Part 12 to Chapter 17.23 of the San Jose Municipal Code to include a Tenant Protection Ordinance limiting no-cause evictions and establishing requirements for property owners to state a Just Cause for eviction in certain limited circumstances.

Direct the City Manager to instruct staff to incorporate into the forthcoming revised Apartment Rent Ordinance a requirement that a property owner offer a renewable one-year written lease to tenants.

Direct the City Manager to instruct staff to return with an amendment to Ordinance No. 28730 (the Interim Apartment Rent Ordinance) to remove the exemption for units with rental subsidies and to make that change to the forthcoming revised Apartment Rent Ordinance.

Direct the City Manager to instruct staff to explore tenant benefits and administration provided by existing relocation policies in the San Jose Municipal Code.

6.1: Approving the sale of Successor Agency owned real property located at 292 Stockton Avenue to the highest bidder, Kade Development LLC, for a purchase price of $4,000,000. The site is currently a parking lot, but is zoned Urban Village.

6.2: Approving the sale of Successor Agency owned real property, located at 201 South Second Street, to the highest bidder, Imwalle Properties, for a purchase price of $726,000.

The Property located at 201 South Second Street currently contains a vacant three story building constructed as a multi-screen movie theatre. When last occupied it had twelve theatres and food and beverage serving areas on all three floors. The Property is subject to a Ground Lease with FC Pavilion LLC (Forest City) that runs through December 31, 2041. Forest City owns the building and leased it to Camera 12 Cinemas. The building has been vacant since September 2016 when Camera 12 went out of business and abandoned the premises. As of this writing Imwalle Properties is under contract to purchase the building from Forest City. Imwalle’s was the only bid received for the property.

6.3 :Approving the sale of Successor Agency owned real property, located at 280 Jackson Avenue, to the highest bidder, AFE Urban, Inc, for a purchase price of $2,800,000. The site is currently a 109-unit residential rental project with ground floor retail (Miraido Apartments). The Property is contaminated with a petroleum based plume that is being injected with a product to remediate the contamination. It is anticipated the site will be clean and receive a closure letter from the County in one to two years. AFE’s was the only bid received for the property.

Where: Oversight Board of the Successor Agency to the Redevelopment Agency of San Jose

Council will be considering signing on to, or modifying and signing, a proposed response letter to Sunnyvale Employee Association, following SEA attendance and public comment at a March 28, 2017 City Council meeting. At this meeting, SEA representatives presented a document titled, “Myth and Facts About City’s Final Brief to Factfinder” regarding salary schedule amendments and raises among SEA represented employees.

Draft City letter states in part:

“At the March 28 City Council meeting, SEA made a public presentation on the status of bargaining, including a handout entitled, “Myth & Facts About City’s Final Brief to Factfinder.” To avoid any appearance of direct dealing, the City Council did not address SEA’s statements, choosing instead to do so in this written form, and to use this letter to address misinformation about the Council approved Last, Best, and Final Offer (LBFO).

To be clear, the City Council has directed a LBFO with a 10% wage increase (including a 5.5% raise upon City Council adoption) with no change in the amount members pay towards their pensions. Assertions that the City’s 10% wage proposal is reduced by a 4% additional pension contribution, resulting in a net 6% wage increase are not true.”

Consenting to contract with Landmark for security at Levi’s; staff recommends approval

On April 4, 2017, the Stadium Authority Board requested that action on the Landmark Event Staffing Services (Landmark) contract be tabled to April 11, 2017 so that additional information could be gathered regarding the request for labor peace and the potential impacts on the proposed contract.

An oral report will be made at the April 11, 2017 Stadium Authority meeting to respond to the Stadium Authority Board’s questions.

The current contract for services terminated as of March 31, 2017. Security services are critical to the ongoing operation of the Stadium. The next non-NFL event is scheduled for April 22, 2017. Consent to the new contract with Landmark for security services will allow for continued operation non-NFL events at the Stadium.

Recommendation: That the Authority adopt a Resolution consenting to a Service Agreement between Forty Niners Stadium Management Company and Landmark Event Services for security services at Levi’s Stadium and note and file Amendment No. 1 to include the Stadium Authority as additional insured under the Insurance Requirements of the Service Agreement.

Staff are recommending that Council conduct a second reading and adopt 2 ordinances, amended after the March 27, 2017 meeting, to amend the City’s Below Market Housing Program and update the housing impact and in-lieu fees.

On March 27, 2017, Council heard and adopted (on first reading) two draft ordinances updating the City’s Below Market Rate (BMR) Housing Program, and establishing housing impact fees and housing in-lieu fees for residential, nonresidential and mixed use developments. The ordinance updating the City’s BMR program has been modified with the following addition: Section 16.65.080(B)(3), “Notwithstanding Section 16.65.080 (A) (5), the City Council may accept fees in lieu of the alternatives in Paragraph 1 provided it makes a finding that special circumstances justify payment of fees over provision of ownership units, such as a finding that the fees generated would result in more affordable units than those required to be provided on site or that funds are needed to finance a pending affordable housing project.”

The ordinance establishing housing impact fees and housing in-lieu fees (Attachment B) has been modified to incorporate the Council’s amendment, which changed the Impact Fee proposed per Square Foot of Net New Residential Floor Area for Single-family Detached product types from $50 to $75. In addition, the fees for Nonresidential use were changed from $30 to $20.37 per square foot for Hotels and from $60 to $35 per square foot for Office, Medical and Research and Development.

If approved, the attached ordinances would become effective in 60 days.